Could 2015 be a bumper year for the UK Associate market?

The UK Associate market has started 2015 in positive fashion. Last year we noticed stiff competition between law firms due to increased demand for transactional lawyers. This bodes well as our recent salary survey identified that that more private practice lawyers would consider moving for the right opportunity.

31% of respondents said that they would consider moving in 2015, up from 23% last year, and whilst a large portion of these responses were from those who would consider the right in house or overseas opportunity, 30% of respondents would consider a move to another UK firm. This is positive news for our London private practice clients.

There are good reasons for moving now, with salary increases becoming prevalent again and a range of options opening up for talented people. The increasing tendency by a growing number of firms to move from away from traditional lockstep towards merit based pay makes it more difficult to measure average salaries by PQE level, but we have included data from across the private practice spectrum. Lawyers in Magic Circle and large City firms generally saw their salaries increased within the merit matrix or by moving up the lockstep.

Candidates are more than ever having to balance the personal and professional, often seeking to strike a middle ground between the lifestyle choice and the emoluments offered in the City. There is also discrepancy within PQE bands, with those at between three and five years’ PQE seeing the highest salary increases. This is easily explained, as the supply of high quality people at this level is low due to reduced qualifying intakes between 2008/09 and 2011/12. It makes sense, then, that 3-5 PQE lawyers demand the greatest increase on a move, with almost all respondents expecting more than 10%, and some expecting up to 50%. These figures will include some who wish to move from a regional practice to London, but with respondents within most other PQE bandings expecting between 5%-15% increase on a move, it is an interesting result.

We have seen a particular plateau at senior associate level in many firms, and significant interest from senior associates seeking a move for better career progression prospects and/or partnership tracks. Bonuses proved to be something of a mixed bag this year, with 43% of respondents securing a bonus, up from 38% last year. However, 62% of respondents received less than 10% of their salary as a bonus, compared to 45% last year. Dissatisfaction with bonus potential is still a common complaint from lawyers who approach us, particularly within contentious areas. Overall 2014 was a promising year with noteworthy turnover increases at many City firms, continued appetite for transatlantic and national mergers, and some very high profile moves stirring up certain quarters of the market.